The opinion of the court was delivered by: Kevin Thomas Duffy, District Judge.
Plaintiff Adrienne M. Lefkowitz originally commenced this
action against her mother Irene B. Marsh to recover death
benefits from two defined benefit pension plans (collectively
"the Plans") adopted by two foreign companies, Arcadia Trading
Company Limited ("Arcadia") and Bay Novelty and Inspection
Company Limited ("Bay Novelty") in which her father Nicholas V.
Marsh was the sole participant, naming Lefkowitz as the sole
beneficiary. By Order to Show Cause and petition dated February
23, 1990, Mrs. Marsh commenced a turnover proceeding in
Estate of Nicholas V. Marsh, File no. 1980/88,
Surrogate's Court, New York County, seeking payment of death
benefits on account of her late husband's participation in the
two Plans during his life.*fn1 On March 14, 1990, Lefkowitz
removed that proceeding to this court where it was assigned
civil docket number 90 Civ. 1716 and Mrs. Marsh promptly moved
to remand the action back to the Surrogate's Court. Mrs. Marsh
died on May 13, 1990, three days before my decision was
rendered retaining jurisdiction and denying her motion to
remand. After Mrs. Marsh died, I allowed The Bank of New York
to be named as preliminary Executor of the Estate of Irene B.
Marsh and it was substituted as the proper party defendant in
place of Mrs. Marsh ("Estate of Marsh").
In the interim, on April 6, 1990, Lefkowitz filed the instant
complaint with this court, which added certain parties not
named and/or properly served in the previous case. I accepted
this complaint, 90 Civ. 2373, as related to 90 Civ. 1716, but
the cases were never consolidated. In this latest action,
Lefkowitz seeks the same benefits as sought by the Estate of
Mrs. Marsh. The parties now cross-move pursuant to Fed.R.Civ.P.
56 for summary judgment.*fn2 Additionally, Lefkowitz seeks a
declaratory judgment on the applicability of the Employee
Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001-1461
to the two foreign corporate benefits plans at
The Plans properly filed a Form 5300, an Application for
Determination for Defined Benefit Plan, with the United States
Internal Revenue Service ("IRS"), seeking determinations that
the Plans as drafted met the requirements of the Internal
Revenue Code ("IRC"), 26 U.S.C. § 401 entitled Qualified
Pension, Profit-Sharing, and Stock Bonus Plans, and § 501
entitled Exception from Tax on Corporations, Certain Trusts,
etc. Subsequently, the IRS issued such determination letters
for tax qualification to each of the Plans. Lefkowitz Motion,
On May 26, 1983, Mr. and Mrs. Marsh executed mutual wills.
Concurrently, they entered into a separate written agreement
("the Agreement"), pursuant to which neither one would "revoke
his or her Will" or "execute a new Will, a Codicil or a trust
agreement disposing of his or her property at death. . . ."
Lefkowitz Motion, Exh. 14.
Each of the Plans had filed with the IRS a Notice of Intent
to Terminate as of December 31, 1984. Lefkowitz Motion, Exh. 9.
For tax purposes, "termination" of the Plans was deemed
effective by the IRS as of December 31, 1984 and the IRS found
no adverse effects from such termination on the Plans qualified
tax status. Lefkowitz Motion, Exh. 10.
In May 1986, Mr. Marsh suffered a paralyzing stroke after
which Mrs. Marsh sought to and did bar him from their home.
Mrs. Marsh then commenced a divorce action in January 1987.
Soon after the divorce action was commenced, Mr. Marsh named
Lefkowitz as the beneficiary of the death benefits payable
under each of the Plans. Lefkowitz Motion, Exh. 11. In August
1987, Mr. Marsh commenced his own divorce action against Mrs.
Marsh, claiming abandonment. Lefkowitz Motion, Exh. 27. Mr.
Marsh died on March 15, 1988. At the time of his death, neither
divorce action had been adjudicated but Mrs. Marsh was still
estranged from Mr. Marsh. On May 13, 1990, Mrs. Marsh died. Mr.
and Mrs. Marsh had three adult daughters from that marriage,
one of whom is Lefkowitz. Mr. Marsh had been estranged from
another daughter for ten years prior to his death and from the
third daughter from 1983 to 1986.
After successfully removing this case from the Surrogate's
Court, Lefkowitz now avers that the Plans at bar are not under
the purview of ERISA for, although having a qualified tax
status under the Internal Revenue Code, they are plans in
foreign corporations not subject to the Labor sections of
ERISA.*fn6 Lefkowitz acknowledges, however, that these Plans
would be subject to regulation under ERISA if they were Plans
set up and/or run in the United States pursuant to
29 U.S.C. § 1001-1461.*fn7
Employee benefit plans are subject to ERISA if they are
established or maintained "by any employer engaged in commerce
or in any industry or activity affecting commerce."
29 U.S.C. § 1003(a)(1). Certain plans, however, are exempt from
ERISA, under Section 4(b) of Title I,
29 U.S.C. § 1003(b)(4). That section provides a limited exemption for a
plan "maintained outside of the United States primarily for the
benefit of persons substantially all of whom are nonresident
aliens." There is no dispute that Mr. Marsh was a citizen of
the United States, the Plans sought and obtained determinations
from the IRS as to their "qualified status," the Plans were
amended from time to time to remain qualified under the Tax
Code, and Mr. Marsh was the sole participant and trustee of the
Plans. Thus, the exemption clearly does not apply in the
Not only was the sole participant in the Plans a United
States citizen, but Mr. Marsh availed himself of all of the
concomitant ERISA tax benefits pursuant to Title II of the IRC.
Indeed, if the Plans were not qualified plans, contributions to
the Plans on behalf of Mr. Marsh would have been included in
his gross income for the years in which contributions were
made. Arcadia and Bay Novelty along with Marsh availed
themselves of all of the privileges under the Internal Revenue
Code. To claim, that a pension plan can selectively avail
itself of the tax benefits of a qualified pension plan set
forth in Title II, and yet not be subject to the rest of ERISA,
primarily designed to protect the rights of employees to their